Hi-Tech Sanitaryware Retailing

The Indian sanitaryware market is the second largest market in South Asia and is growing at the rate of 22 per cent per annum, says a report by Netscribes (India) Pvt Ltd consulting solution. Many international brands like Kohler, H & R Johnson and Roca have entered the Indian market in the past decade. The latest addition to the list is a German brand Grohe, which seeing the huge potential of the Indian market could not resist but enter. The sanitaryware retailing has come a long way and now involves technology centres and trained fitters, who are also the source of information, regarding the local market, to the retailers.

Also, considering the construction of residential societies, and hotels etc to cater to the common wealth games, the time is right to tap the sanitaryware market in India. Let’s explore the basics.

Why tap India for sanitaryware?

India had a GDP of 6-7 per cent per annum even when other countries were dying of recession. The sanitaryware market has grown almost double to 2000 crore in 2009. All big international brands regardless of their category are entering India, the fastest growing country which has a young population of more than 50 per cent. The newer generation wants better homes, better services, better quality and better facilities; which is the reason enough for the sanitaryware market to grow in India.

“India is no longer a testing ground, but a lucrative market for premium brands. It’s increasingly willing to spend on premium quality and are becoming extremely value conscious. People are also aware of leading global brands in the space with high growth potential. India is being looked upon by the entire world as an emerging market and potential global hub for many products”, says Mathew Job, CEO, Grohe India.

The Indian consumer which is the direct consumer is not very easy to tackle. It’s well educated, well placed, well travelled and ambitious; tracking it isn’t an easy job so how do you cater to their needs? “Known for its products and technology, Grohe has carved out a niche for itself in the premium segment with a strong backing of superior product quality and customer service. Most of the Grohe products that are available globally are already on offering in the Indian market. In fact, we are now launching a product line that will specifically cater to the Asian market. The new Grohe Baulines will be available in the market from April 2010”, replied Job.

Retail Channels

For a foreign sanitaryware brand, there are various channels through which it can enter India. Job states that a retailer can come in with help of various channels. You can have a joint venture (JV) with an Indian company who can sell your products in India. You can take help from wholesales, small retailer and also with your own outlets across the horizon. Having a JV with an Indian company surely helps as the Indian company is already known in India and also helps you to have a better image in front of the customers.

“We categorise our stores on the basis of business potential, customer footfalls etc. Our in-store visual merchandising approach depends on the category of the store. Store designs across all categories have a similar theme because we want that the consumer be exposed to a consistent image of Grohe for maximum impact. Last year we launched Grohe’s first Technology Centre in Asia in the city of Bangalore, India. The Technology Centre is not a sales showroom but a place where visitors can experience the unique way in which Grohe has synergised design, technology and quality into its products, allowing customers to truly enjoy water,” states Job. That’s surely a new idea, experiencing water not only in amusement parks but stores.

Hurdles in India

Other than the obvious hurdles of FDI and other licensing issues, what other threats does the sanitary ware market see? “The lack of sufficiently trained plumbers was a huge concern for us when we came to the Indian market. Globally, plumbers (installers) are a major focus group for us. We work with them; we don’t just train them, we get feedback from them about what is it that the consumers like and don’t like. Plumbers are our greatest marketing research tool. But, we are concerned that plumbers in India are not organised to a great extent to allow us to benefit from this resource. This is something we hope to change gradually in the coming years” contemplates Job.

Sanitary fittings industry in India witnesses a new entrant frequently and is growing at a significant rate every year. Also, with the construction spree going on to cater to the common wealth games like residential societies, hotels and malls it will create a boom in the near future. In addition, consumers are now willing to spend a lot more on making their bathrooms look and feel good. These factors when taken together will ensure a robust growth for the industry in the future.